Shares of Nvidia pared much of their earlier gains and were last up only 1.4%, slipping from a record high of $502.66 hit earlier in the session.
Analysts pointed to profit-taking after a strong run of gains heading into the chip designer’s second-quarter results. “The entire market has been in ‘sell the news’ mode. (Nvidia) was an incredibly crowded long (position) as was technology in general, and traders were primed to sell initial up moves,” said Michael James, managing director of equity trading at Wedbush Securities.
Shares of major technology and growth stocks such as Apple Inc, Netflix, Tesla, and Meta Platforms reversed course from their premarket moves, falling between 1.8% and 4.5%.
Investors had hoped that Nvidia results would revive a rally in broader stock markets that had stalled recently due to concerns about interest rates staying higher for longer.
Fed Chair Jerome Powell’s speech at an annual central bank summit in Jackson Hole on Friday could provide further clarity on the direction for US interest rates. Philadelphia Fed President Patrick Harker in an interview on Thursday said the Fed will need to keep rates restrictive for a while. Data showing a still strong labor market, ahead of the commentary, did little to ease interest rate jitters. Initial claims for state unemployment benefits fell last week, according to the report.
“I’d be surprised if this is the moment that they (policymakers) choose to unveil a significant change in the trajectory they have been on. I think it’ll be a somewhat continued hawkish discussion from the Fed,” said Ben Kirby, co-head of investments at Thornburg Investment Management.
Traders’ bet of the central bank holding its interest rate at current levels in the September policy meet slipped to 80.5% from 84.5% earlier, according to the CME FedWatch Tool.
Source: https://www.brecorder.com/news/40259700/wall-st-falls-as-nvidia-boost-fades
